By Angela Palumbo
Cinemark Holdings stock could take another hit if Netflix's deal to acquire Warner Bros. goes through and potentially limits the amount of time movies stay in theaters, a Deutsche Bank analyst wrote on Monday.
Bryan Kraft lowered his price target on Cinemark to $32 from $34 on Monday.
Kraft's price target decrease comes after Cinemark stock has dropped 23% this year to about $24. One reason for the decline has been a weaker-than-expected 2025 box office performance. While some movies -- like A Minecraft Movie, Wicked: For Good, and Superman -- were hits, the overall 2025 box office hasn't lived up to analysts' expectations.
"4Q box office performance to date has been well under expectations and has dampened expectations for what otherwise had been set up to be an exceptional year in 2026," Kraft wrote.
Another reason for the stock's drop has been investor concern over what will happen to the movie theater industry if Netflix is successful in acquiring Warner Bros.
Netflix announced on Dec. 5 that it has agreed to buy Warner Bros. Discovery in a nearly $83 billion deal that includes the film and TV studio assets of Warner Bros., plus HBO Max and HBO. Warner Bros. plans to spin off its cable networks business to shareholders before the deal closes. Netflix expects the deal to close in 12 to 18 months.
Shares of Cinemark dropped 8% on Dec. 5 following the announcement. Fellow movie theater chain AMC Entertainment Holdings fell 2.6%.
Netflix is the world's largest streaming company. It offers exclusive content on its platform, but has also recently started partnering with movie theater chains to get some of that content on the big screen for limited times. However, streaming is Netflix's bread and butter. It's possible Netflix changes the way Warner Bros. releases movies post-merger, negatively impacting movie theater chains.
Netflix co-CEO Ted Sarandos hinted at those changes on a Dec. 5 conference call.
"Over time, I think the windows will evolve to be much more consumer friendly to be able to meet the audience where they are quicker," Sarandos said.
"We estimate Cinemark would face a $100M annual impact on EBITDA [earnings before interest, taxes, depreciation, and amortization] in 2029 onward in the case of Netflix completing the WB acquisition and shrinking exclusive theatrical windows," Kraft said. He also believes Cinemark stock could go to about $22.50 if the Netflix deal goes through.
Barron's has reached out to Cinemark for comment.
There could be upside ahead for Cinemark stock if Netflix's deal doesn't go through, Kraft said. The companies still need to get regulatory and shareholder approval, and that could be a tough road ahead.
Paramount Skydance also wants to buy all of Warner Bros. Discovery and has made a competitive offer to acquire the owner of the Harry Potter franchise.
Paramount CEO David Ellison wrote in a letter to Warner Bros. shareholders on Dec. 10 that it's offer is "superior," to Netflix's. Ellison also said when it comes to the future of movie theaters, "we do not plan to reduce theatrical output -- we intend to grow our slate to over 30 films each year."
Kraft believes that Paramount is the more likely buyer of Warner Bros. at this time. He wrote that if Paramount does end up being the acquirer of Warner Bros., he'd expect an immediate recovery back to the $28 range for Cinemark stock. That's also why Kraft maintains a Buy rating on Cinemark shares.
Cinemark stock was dropping 2.7% to $24 on Monday. The S&P 500 was off 0.2%.
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 15, 2025 12:30 ET (17:30 GMT)
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